As a “good, and easy to win” trade war escalates with China, now would be a dumb time to take a useful tool away from Washington state’s exporters of wine, seafood, software and — oh, yes — airliners and other advanced manufactured products.
Especially so, since that tool’s full utility was restored only earlier this spring after being left hobbled for nearly four years.
That tool is the U.S. Export-Import Bank.
The Export-Import Bank, in operation for 85 years, helps businesses large and small by providing loans, insurance and other assistance that help promote exports by those businesses. That trade assistance helps those businesses secure sales that otherwise might not be facilitated by private-sector banks. While the federal government provides some funding for the bank’s administration, its lending makes the bank self-supporting, and it actually is a money-maker for the nation, returning $5.2 billion to the U.S. Treasury during the last 10 years.
But the bank’s effectiveness has been hobbled in recent years, first when Congress failed to reauthorize its charter in 2015 when “tea party” conservatives in the Republican Party blocked its renewal. The bank was reauthorized later that year, but some Senate Republicans refused to confirm appointees to its board of directors, leaving the board without a quorum and limiting the loans it could make. The bank wasn’t back at full strength until this May when the Senate confirmed three new appointees from President Trump.
Now, just when its assistance is needed most by exporters in Washington state and throughout the nation, the bank’s reauthorization is back before Congress and must be renewed before it expires at the end of September.
A new report by the Seattle-based Washington Council on International Trade details the importance of the “Ex-Im Bank” for industries and employers in a state where about 40 percent of all jobs are tied in some way to international trade.
Boeing — except for the last four years when loans were limited — is among the better-known bank customers as it secures financing for its customers for the multi-million-dollar plane orders it makes around the globe. But 90 percent of the financing work the bank does is with small businesses, including those throughout the state and in Snohomish County.
Among the exporters in the county that have secured sales to foreign customers with the aid of the Export-Import Bank in the last four years are manufacturers such as Arlington’s Aiooa Systems, Granite Fall’s Cobalt Enterprises, Mukilteo’s Vista Clara and Aquaintech in Lynnwood, Snohomish winemaker Quilceda Creek Vintners and Lynnwood’s Triad Fisheries.
“One of the things that has impressed me is the diversity of industries within the state” that the bank has helped, Lori Otto Punke, president of WCIT, said by phone Thursday. “If you look across the state, we’re not a one-company town, from ag to tech to services, you name it; without a fully functioning bank we’d be really impacted.”
The WCIT estimates that for 2014-18, the loans and other assistance the bank provides directly supported 25,200 jobs. A deeper look at those job numbers for each year shows what happened while the bank was largely out of commission. The bank’s assistance in 2015 supported more than 10,160 state jobs in 2015; by 2018, that number had dropped to 168.
That drop-off also is shown in the total amount of loan and insurance assistance to state exporters: $6.1 billion in 2015 and $46.2 million in 2018.
There is reason to believe Congress won’t allow the Ex-Im Bank to be shut down yet again, even after negotiations failed to move legislation in the House earlier this year. In July, bipartisan legislation in the Senate, co-sponsored by both Sens. Maria Cantwell and Patty Murray, was introduced that would reauthorize the bank for a 10-year period and would raise its cap on expenditures to increase the number of loans and other assistance. It would also authorize the use of a temporary board, should Congress again drag its feet in renewing the charter in the future.
There’s growing uncertainty over when the U.S. might reach a much-needed trade accord with China, considering President Trump’s “tariffs-first” approach to negotiations and retaliation by China. Nor does Congress seem poised to quickly ratify the United States-Mexico-Canada Agreement that is intended to replace the North American Free Trade Agreement.
What both Congress and president can do now is reauthorize the Export-Import Bank and let Washington state’s wineries, seafood companies, manufacturers — and plane makers — make the sale.